IG Metall wants to push through wage increases of between seven and eight percent for the 3.9 million employees in the metal and electrical industry. The union board recommended this demand to the collective bargaining districts for the negotiations with employers, which are expected to begin in September, said IG Metall boss Jörg Hofmann on Monday.

It is also about maintaining the purchasing power of citizens for private consumption. If private consumption collapses, a recession could threaten.

From the point of view of the union, after the recent Corona agreements, given the good order situation of many companies and high profits, it is time for wages and salaries to be increased permanently.

In its recommendation, IG Metall bases its recommendation on inflation and productivity development and, in view of the high profits of large car companies such as BMW and Mercedes, adds a redistribution component.

To justify the recommendation, IG Metall uses, among other things, the economic situation in the industry. Accordingly, according to a survey of works councils last year, significant increases in sales and productivity were recorded on average across the entire industry. Nevertheless, according to IG Metall, the situation was very different depending on the sector. For example, production in the automotive industry fell significantly by six percent compared to the previous year, while it increased in mechanical engineering.

However, the tariff policy cannot compensate for the high inflation and rapidly rising prices for gas and electricity. This requires a further relief package from the federal government.

In addition, Hofmann calls for a gas price cap to ensure normal household consumption and a reduction in the price of electricity. Hofmann also advocates an excess profit tax, which was recently discussed in particular with a view to the high profits of the mineral oil companies.

Strong price increases for energy and food drove the inflation rate in Germany to 7.9 percent in May, the highest level in almost 50 years. The Bundesbank expects inflation of 7.1 percent for the year as a whole, based on the so-called harmonized index of consumer prices (HICP).

The European Central Bank uses this for its monetary policy. In May, the HICP in Germany was 8.7 percent above the previous year’s level.

The new collective agreement for the metal and electrical industry is to run for twelve months. The recommendation is not yet the final requirement. This will be discussed in the regional wage committees on June 30th. The board of directors wants to decide on the demand after the discussions in the collective bargaining districts on July 11th.

The agreement negotiated with employers in North Rhine-Westphalia last year provided for a corona bonus of 500 euros and an annual “transformation money”. This should be paid in February 2022 in the amount of 18.4 percent of a monthly salary. From 2023 it will rise to 27.6 percent and can also be used to reduce working hours.